The management of China National Petroleum Corporation (CNPC) visited gas producing subsidiary of Gazprom – Gazprom dobycha Yamburg LLC.

Zhang Xin, Head of the International Cooperation Department and Cao Wei, Head of Russia and Central Asia communications of this Department, other experts of CNPC arrived on a visit to the Far North within the frames of implementation of the Agreement of Strategic Cooperation between OAO Gazprom and CNPC.

Mr. Zhang Xin noted that two prospective delivery projects of gas supply to Russia and China are under discussion. Gas delivery from the operating Unified Gas Supply System of Russia (through the western section of the Russian-Chinese border) as well as from the fields of the Far East and Eastern Siberia is considered. And one of the aims of this visit is to find out more about the operation of gas producing subsidiaries of Gazprom and prospects of their development.

Mr. Zhang Xin pointed out that if the negotiations with Gazprom will end successfully, then annual gas supply to China may reach 38 bcm of gas from the fields of the Far East and 30 bcm from the western section in the short term.

The first day of the visit the guests attended the Zapolyarnoye oil gas condensate field from the bowels of which over 100 bcm of natural gas is produced annually. Sergey Mazanov, deputy director general for prospective development of Gazprom dobycha Yamburg, when attending the operating gas well cluster and comprehensive gas treatment unit 3S (UKPG-3S) (the capacity of UKPG-3S is 32, 5 bcm of gas per year, and its equipment meets the latest scientific achievements in global gas production) familiarized the guests with the specific features of gas production and treatment under extreme natural climatic conditions of the Far North. The managers of China National Petroleum Corporation could personally assure themselves of reliability of its Russian partner. During the excursion to the shift settlement they could get an idea of the social policy of the company.

- We have seen for ourselves not only reliability of the resource base of Gazprom but  also familiarize ourselves with best practices and  high technologies of the field development and  operation, they are densely concentrated in Zapolyarnoye, - says Mr. Zhang Xin. – The gas industry of China is dynamically developing and the experience of Gazprom will be of great use to us.

- We have assured ourselves once again that our strategic partnership is developing in a right direction and we shall try to intensify the negotiation process, - continues Mr. Zhang Xin. – To our view the early implementation of this project will be mutually profitable for both parties: Russia will be able to propose it resources, diversify gas routes. It is profitable for China with its rapid-growing economy to have such a reliable gas supplier as Gazprom.

The visit of the China National Petroleum Corporation delegation to the Yamalo- Nenets Autonomous okrug ended with acquaintance with places of interest of gas capital of Russia – Novy Urengoy.

Background:

The Agreement of Strategic Cooperation between OAO Gazprom and CNPC was signed on October 14, 2004 in Beijing within the official visit of the Russian Federation President Vladimir Putin to the People's Republic of China.

The Agreement stipulates scrupulous discussion of the issues relative to the arrangement of Gazprom’s natural gas deliveries to the PRC.

To steer the Agreement implementation, the parties set up the Joint Coordinating Committee.

China National Petroleum Corporation is the largest state-owned oil gas company of China (the participation of the Government is 100%) and one of the leading integrated oil and gas producing companies in the world.

CNPC was incorporated on the platform of the former Ministry of Petroleum Industry of the PRC in 1998. At present it comprises companies involved in prospecting, production, transportation and storage of oil and gas as well as oil processing, petro chemistry and research. CNPC is the largest crude oil producer and supplier and retains a dominating position in oil and gas production, processing and marketing in China. CNPC and its subsidiaries are involved in 29 international projects

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